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Cairns Regional Council Submission Number: 40 Date Received: 17/02/2014 JOINT SELECT COMMITTEE ON NORTHERN AUSTRALIA This submission is made by Cairns Regional Council Cairns Regional Council 14 February 2014 P O Box 359 Cairns Qld 4870 Submission to Joint Select Committee on Northern Australia Cairns Regional Council Terms of Reference The committee is to consider policies for developing the parts of Australia north of the Tropic of Capricorn, spanning Western Australia, Northern Territory and Queensland, and in doing so: examine the potential for development of the region’s mineral, energy, agriculture, tourism, defence and other industries. provide recommendations to: o enhance trade and other investment links with the Asia-Pacific; o establish a conducive regulatory, taxation and economic environment; o address impediments to growth; and o set conditions for private investment and innovation identify critical economic and social infrastructure needed to support the long term growth of the region, and ways to support planning and investment in that infrastructure. Contents Page 1. Introduction 3 2. The Development of Northern Australia 4 3. Critical Priorities for Consideration 8 4. The Potential for Development of the Region’s Industries and Industry Priorities 12 5. Economic and Social Infrastructure 39 Appendix 1 – Summary of Priorities 47 Appendix 2 – Summary of Infrastructure Requirements 52 Acknowledgement: This submission has been prepared with the assistance and input of Cummings Economics. “Australia’s Tropical North – Initial Challenges, Historical Development, Current Progress & Future Prospects” – February 2014. P a g e | 2 of 52 Submission to Joint Select Committee on Northern Australia Cairns Regional Council 1. Introduction The Tropical North Queensland Region is one of Australia’s premier tourism destinations being located in close proximity to two of the world’s great natural wonders – The Great Barrier Reef and the World Heritage listed tropical rainforest. Additionally, the attractions of the Atherton Tablelands, Cassowary Coast, Port Douglas, the Gulf of Carpentaria and Cape York Peninsula provide a diversity of experience for visitors to the region. The city of Cairns is the “regional capital” and the Cairns economy has a symbiotic relationship with the region it services. The city’s growth is highly related to the growth of the region it services and the region is highly dependent on the extent and efficiency of the infrastructure and services provided by the City. The critical element in Cairns standing as the “regional capital” is the Cairns Airport which is the conduit for domestic and international tourists to the Region as well as providing vital airfreight services to a range of markets in Australia and in key Asian counties. The Region’s strong tourism base is expected to continue to expand to meet increased demand from international visitors, particularly from Asia. This strength has seen the development of significant infrastructure to service more than two million visitors per annum. However, whilst tourism is the Region’s major industry, there are many other smaller, but no less critical, industries which will continue to expand and diversify the local economy. In particular, Cairns role in the provision of services to a range of industries and markets and its growing presence in delivering education and research capabilities based on tropical expertise are considered to be major opportunities for expansion. Cairns has a growing presence in the Asia Pacific region built on existing transport and trade linkages to Papua New Guinea and many Pacific Island and South East Asian counties. Its location, combined with its existing natural and built resources, positions the City and the surrounding region to play a significant role in the development of Northern Australia. There is current evidence of renewed interest in Cairns as tourism visitation increases and the property market makes a tentative recovery following a period of subdued activity brought about by the global financial crisis. Plans have been announced for a $4.2 billion integrated tourist resort and casino primarily catering for international visitors. This project alone, if it proceeds, is expected to result in the creation of 16,000 jobs in the construction phase and a further 25,000 ongoing jobs when completed. The flow-on effects of this project to the regional economy will be game-changing and will challenge the region’s ability to cater for such a significant boost in employment, population and economic activity. In this submission, a synopsis has been provided of factors which have historically limited the development of Northern Australia. It is apparent that many of these limiting factors are still evident today. The submission concerns itself, not only with issues relating directly to the city of Cairns, but with issues relating to the Region the city services including some countries in the Asia Pacific region. It identifies four critical priorities which impact on almost all industries and the broader regional economy in general and a further 21 industry priorities. Additionally, critical infrastructure for industry development and community wellbeing has also been identified for consideration. P a g e | 3 of 52 Submission to Joint Select Committee on Northern Australia Cairns Regional Council 2. The Development of Northern Australia Northern Australia, being that area of Australia north of the Tropic of Capricorn, comprises 36% of Australia’s land area and is characterised as being rich in mineral and natural attractions but with a relatively small population base. Due to its remoteness and the challenges posed by its tropical environment, the Region was late being settled and initially slow to develop compared to the earlier-settled regions of Southern Australia. In the past fifty years, following the discovery and development of significant resource deposits, realisation of tourism potential, advances in primary industries and improvements in everyday living conditions, economic and population growth has escalated – to an extent where growth has exceeded that for the balance of the nation. Northern Australia now provides about half of Australia’s export revenue, principally from mineral resources, but also from primary industries and tourism. The discovery and development of mineral resources in Central Queensland, around Mount Isa, at Weipa, at Gove and in the Pilbara have been major drivers of this expansion in export revenue with resources taking over from primary production (principally beef) as the Region’s largest export sector. In more recent years, tourism and natural gas have emerged as major industries which have further grown export revenues and provided substantial employment throughout the region. The relatively rapid growth in these industries (and in population) over the last fifty years has, however, resulted in a lag in the provision of service infrastructure, including roads, energy, telecommunications, health, education and community services. At a political level, almost all decision making affecting Northern Australia has been directed from the South. At a national level, this was from Canberra and at a state government level from Brisbane and Perth, and, in the case of the Northern Territory, from Canberra. The special needs of the North in policy and types of infrastructure have often been swept aside in the adoption of uniform national policies to meet the needs of the majority in Southern Australia. Historically, it may be argued that Government policy was deliberately aimed at lessening the nation’s reliance on primary industries and commodity exports by building up its manufacturing sector under protectionist policies. Clearly the regional economies which were very heavily dependent on their primary commodity export industries and had weak manufacturing and service industry structures were a victim of this policy direction. This resulted in a situation where the manufacturing base of the Region remains relatively small with much of the region’s service requirement being provided by industry and government in Southern Australia. Any consideration of the development potential of Northern Australia must not only consider the types of industries which may provide export revenue and employment and development opportunities, it must also consider the demands these industries place on regional communities. In doing so, the unique factors of a series of very different sub-regions and communities must be recognised. Northern Australia covers a large area. It is clearly not a homogenous area, but an aggregation of a series of very distinct sub-regions, each with an area equivalent to the states in Southern Australia. Each of these major sub-regions has a “capital city” – a regional hub with a typical capital city relationship providing a centre for delivery of manufacturing, transport, distribution, government and non-government services to the region it services. P a g e | 4 of 52 Submission to Joint Select Committee on Northern Australia Cairns Regional Council There are four such cities and regions in central and northern Queensland: Rockhampton – servicing the immediate Fitzroy region and the central west. Mackay – servicing the Mackay/Whitsunday area. Townsville – servicing the northern region and west to Mt Isa. Cairns – servicing the tropical north Queensland region, west to the Gulf and north to the Papua New Guinea border. Similarly, Darwin commercially services the Northern Territory (although there are
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